Like Egyptians, Indians have a strong sense of culture

Like Egyptians, Indians have a strong sense of culture and identity

HE Mr. Wael Hamed, Egypt’s ambassador to India, discusses Egypt’s strengths as an investment destination and future collaboration opportunities with India.

IBT: What have been Egypt’s learnings from the past three years of trade volatility?

HE Wael Hamed: Over the past 2-3 years, we see that crises are increasingly international and not local in nature. COVID-19 started in China; just two or three months later, it jumped to the EU, then to the US and back to Asia. It’s the same with environmental problems. Yet at the same time, we have seen an increased trend towards localization of production because every country wants to protect itself as much as possible. This comes with some positive and negative consequences.

When it comes to certain aspects of production, it is important for countries to be self-sufficient. For example, if Egypt was not selfsufficient in many medical products, it would have faced a severe problem when COVID hit. Similarly, now we are trying to increase wheat production for food security.

So, we see these two seemingly opposing trends. As a matter of fact, it boils down to the difference between strategic products and consumer products. We can remain open to and sustain globalisation in consumer products, but in some strategic products, we will have to be more self-reliant to protect ourselves. I think India is also doing the same thing when it comes to a strategic sector like defence.

So, recent global economic challenges – particularly COVID and the Ukraine crisis – have shown the crucial importance for developing nations such as Egypt and India, to diversify their economies to be able to adapt to such external shocks.

The global supply chain crisis has also taught us to give more attention to localization of production of strategic and non-strategic goods in the different fields of agriculture, industry and health care. Moreover, the global food security crisis has shown the importance of diversifying our wheat imports and increasing local production.

IBT: How have India-Egypt trade relations evolved over the past decade? Which industries have unrealized potential?

HE Wael Hamed: Bilateral trade witnessed positive growth rates with every passing year. Trade volume in FY 2021-22 recorded US$ 7.26 billion, a significant increase from US$ 4.15 billion in 2020-2021.

We are exploring ways to strengthen our trade, business, and investment ties and explore new opportunities for cooperation in sectors, such as IT, pharmaceuticals, education, and tourism.

Tourism accounts for around 12% of Egypt’s annual GDP and tourists from Russia and Ukraine make up around 40% of tourists in Egypt. With the outbreak of the war, it was put under severe pressure. And tourism is not only hotels. It’s restaurants, cab drivers, shopkeepers – a lot of things.

We have been trying to tap new and lucrative markets. India is one of them, with potentially around 40 million outbound tourists. In my view, Indian tourists are very promising and have a distinct approach. The first thing they talk about is Egypt’s unique history, culture, heritage, which make it a unique tourist destination. Conversely, over the past 2-3 years, there is equally a sense of curiosity in Egyptian tourists for India. Earlier, most of of them went to Europe and the US.

The second thing is, of course, food security. Egypt is one of the major, if not biggest importers of wheat with annual imports of 12-13 million tonnes. With the Ukraine crisis, the question of food security has become increasingly important. Last April, Egypt approved India as a wheat supplier after a technical delegation concluded that India’s wheat meets essential SPS requirements & other food quality standards. This can lead to a strategic relationship that can extend over years and years. Thirdly, Egypt is self sufficient in natural gas and supplies to India at reasonable prices.

To facilitate visits of business and trade delegations and tourism, Egypt’s national flight carrier, EGYPTAIR, resumed direct flights between Cairo and Mumbai last May. It is currently negotiating a direct link between Cairo and Delhi. We have further relaxed visa procedures to attract more Indian businesspeople.

IBT: What are Egypt’s major investment advantages and incentives for foreign firms?

HE Wael Hamed: The Suez Canal Economic Zone is a well-established location for foreign investors and is very encouraging in terms of location, infrastructure & logistics. Focus sectors in the SC Zone are pharma, agribusiness, logistics, petrochemicals, automotive, and textiles, food processing, and green hydrogen/ammonia etc. Corporate tax, VAT and customs tax incentives are there for investors along with incentives for labour-intensive projects using local components and export support programme etc.

Egypt has access to large key markets through various regional and bilateral FTAs with the US, European, Arab and African countries; which secures benefits to Egyptian-based producers supplying to these markets. This is a market of 1.3 billion people, if we had a view of Africa, Europe and the Middle East all together, which is equivalent to the

size of the Indian market. On top of that, it encompasses high per-capita income markets like Europe and the Middle East. Egypt is also located on key international logistics routes, particularly the Suez Canal.

If the Indian producer comes to Egypt, he will be able to access the European market duty free, because Egypt already has an FTA with the EU. Moreover, with Egypt, you are basically cutting down the distance between India and Europe into half, thereby cutting down costs of fuel, shipments, insurance and time.

IBT: How do you see Egypt-India collaboration for new sectors like AI, ML, and green tech?

HE Wael Hamed: I see both countries not only as potential partners, but also as pioneers. For example, India is one of the leading countries in the world in solar energy. Prime Minister Modi has called for the creation of the International Solar Alliance Initiative – One Sun, One World, One Grid. Egypt is interested in cooperating with India in this initiative, because we are one of the biggest producers of solar energy in the region. In fact, we have one of the largest solar parks in the world.

Also, Egypt is one of the major countries attracting investments in green hydrogen, where Indian companies are also interested. Definitely, this is a futuristic technology to tackle the environmental crisis.

In other aspects as well, there is a huge potential. In IT, India has experience, but Egypt also has a very good infrastructure, not only in terms of application, but also location. One can see the Suez Canal, not only as a connection between the East and the West for maritime trade, but also in terms of data connectivity. Also, we have a labour force of educated people including software engineers, call centres, etc that are needed for a dynamic IT sector.

And then there is pharmaceuticals. India is rightly called the ‘world’s pharmacy’ and is also well-known for its indigenous and alternative medicine systems (AYUSH). That’s why, we seek greater cooperation with India to develop, research and manufacture pharmaceutical products. Now we’re thinking about cooperation projects between Serum Institute of India and the Egyptian Holding Company for Biological Products and Vaccines (VACSERA) that’s responsible for production of vaccines in Egypt. So, there are new areas of higher technology that both countries are coming up with.

We have also shown interest in cooperation between the Egyptian Ministry of Education and the Indian Institute of Technology (IIT) to establish a branch of the IIT in Egypt. If we have an IIT, it will attract students from Africa and the Middle East apart from Egypt.

HE Mr. Wael Hamed is Ambassador of Egypt to India. Views expressed are personal.